224 P. 469 | Cal. Ct. App. | 1924
Plaintiff instituted this action against the defendants to recover the amount due on a promissory note, executed by defendant Tout, and indorsed and payment thereof guaranteed by defendants Albert and Valencia. *531 The defendant Tout failed to appear in the action and judgment by default was rendered against him for the full amount of the note. The court refused to give judgment against either of the defendants, Albert or Valencia, but rendered judgment in their favor, that is, a judgment that plaintiff take nothing against either of said defendants. The appeal is taken by plaintiff on the judgment-roll only, and from only that part of said judgment in favor of the defendants Albert and Valencia. The findings show that the note was executed by Tout in favor of Albert, who, prior to its maturity, indorsed the note to Valencia without consideration and for the purpose of collection. Valencia, before its maturity, indorsed the note and delivered it to plaintiff as security for the payment by said Valencia of certain money due and thereafter to become due plaintiff from Valencia on account of groceries purchased and to be purchased by Valencia from the plaintiff. The amount due plaintiff on this grocery account, the court found was $1,851.75. The court further found that the amount due on the note was $2,000 principal, $151.20 interest and $200 attorney's fees, for which amounts the court gave judgment in plaintiff's favor against defendant Tout, and further provided that plaintiff, after paying himself the amount found due him, should pay the balance, if any remaining in his hands, to Valencia and Albert. The court found that, although the note was executed in favor of Albert, at all times Albert and Valencia each owned one-half of said note, but that plaintiff had no knowledge of the ownership of the one-half of said note by the defendant Albert.
It is the contention of plaintiff that the findings show that he was the bona fide holder of the note sued on in due course under the so-called "Uniform Negotiable Instruments Law"; that he held the note as pledgee, and that he had the right to enforce payment thereof from all parties liable thereon, including Albert and Valencia, and to apply the proceeds upon the indebtedness owing to him by Valencia, and that the court therefore erred in granting judgment in favor of the defendants Albert and Valencia.
Reliance is placed by plaintiff, in support of his contention, upon two sections of the Civil Code which were adopted in 1917, at the time of the enactment of the so-called Uniform *532 Negotiable Instruments Law. Said sections are a part of said law and are as follows:
"Section 3108 Where the holder has a lien on the instrument, arising either from contract or by implication of law, he is deemed a holder for value to the extent of his lien."
"Section
Plaintiff concedes that prior to the enactment of the above sections of the code the decisions of the supreme court of this state were adverse to his contention, at least in so far as the defendant Valencia is concerned. In the case of Sparks v.Caldwell,
[3] Nor is appellant supported in his claim for a judgment against defendant Valencia by the provisions of section
The defendant Albert occupies a different position, however. At the time plaintiff acquired the note from Valencia the name of defendant Albert appeared thereon as an indorser and guarantor. While the court found that he was the owner of one-half of said note, it further found that plaintiff had no knowledge of such ownership at the time he acquired the note. The plaintiff was, therefore, as far as the defendant Albert was concerned, a holder for value and in due course of business. He held it free from any defects of title of any prior party thereto and free from any and all defenses available to any prior party, and was *534
entitled to enforce payment against all parties liable thereon, which included the defendant Albert. (Sec.
That part of said judgment in favor of defendant Valencia is affirmed, but that part of said judgment in favor of defendant Albert is reversed, with directions to the trial court to modify said judgment by causing judgment to be entered against said defendant Albert for the amount found to be due on said promissory note.
Conrey, P. J., and Houser, J., concurred.